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Secondary shops flooded with unicorn sellers

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Re: Secondary shops flooded with unicorn sellers

#121

Post by beatpanda »

jrockway wrote: post #112
beatpanda wrote: post #107

Earlier quoted context omitted.

I can say this much -- I have exactly one friend who also works as a software engineer. The rest of my friends are activists, students, service industry workers and non-tech entrepreneurs who are getting absolutely crushed by the cost of living in the Bay Area. A massive, "catastrophic" crash in the tech industry would, on balance, be great for all of them.

> who are getting absolutely crushed by the cost of living in the Bay Area Outside the bubble, New York has always been like this, and it's not because of the tech industry. Like the Bay Area, New York appeals to a lot of people, and with the appeal comes competition for housing. The Bay Area is a desirable place to live -- the weather is always excellent, there's plenty of stuff to do (try finding a mountain to ride…

I've only lived in the Bay Area for 6 years and I've watched it change dramatically for the worse. My friends who have been here since the 90s talk about it in biblical, apocalyptic terms. It isn't "just like that". Something fundamental has changed.

Re: Secondary shops flooded with unicorn sellers

#122

Post by prostoalex »

shostack wrote: post #38
mavelikara wrote: post #18

Earlier quoted context omitted.

Depends on the terms under which the employee is issued stock. From a 2014 article[1]: Two months ago, an early Uber employee thought that he had found a buyer for his vested stock, at $200 per share. But when his agent tried to seal the deal, Uber refused to sign off on the transfer. Instead, it offered to buy back the shares for around $135 a piece, which is within the same price range that Google Ventures and TPG…

Really interesting, thanks for sharing. Does this generally piss off the employer? I wonder if the employee faced any sort of retaliation or anything from this.

They generally don't want their cap table to explode with randos, and if there's access to sensitive information, they obviously don't want the cases where unscrupulous party buys shares just to feed that data to competitors.

With that said, it's obviously in their interest to provide some liquidity to avoid their long-time employees from defecting to GOOG or NFLX or FB, which reward with perfectly liquid stock grants, so in case of demand from the buy-side an employer would orchestrate a secondary market transaction. On the buy side in most cases you'd see an SPV managed by the VC who invested in previous rounds (which helps with keeping the cap table low).

Ironically, for smaller VCs entire economics of their firms are based on these SPVs (which sometimes charge upwards of 2% management fee on top of 20% carry - and that's for a chunk shares sitting quietly doing nothing).

Re: Secondary shops flooded with unicorn sellers

#123

Post by prostoalex »

roymurdock wrote: post #12

> Secondary sales totaled $47 billion in 2014, up 80 percent from the previous year, according to investment bank Evercore. Still a relatively small volume of sales we are talking about here. Does anyone have any information on the structure of the secondary market - big players, regulation, etc. The article was light on details.

Just follow the headlines - Fidelity (FBGRX, FDGRX), Blackrock, T. Rowe Price (PRNHX), GSVC - http://gsvcap.com/charts/

Re: Secondary shops flooded with unicorn sellers

#124

Post by eru »

sk5t wrote: post #111
nostrademons wrote: post #103

Earlier quoted context omitted.

Options, then. Buy a put option and your downside is limited to the cost of the option; you just get nothing if it's out of the money. My point is that there are plenty of financial instruments that exist precisely so you can "put your money where your mouth is".

Options vs. shorting are just two different ways to risk all your capital on a bet... the "unlimited" downside of a short position has a practical limit--it's when your broker forces your account to cover with buys (the short squeeze) and you zero out.

You describe selling a call. Not buying a put. (jessaustin is right about these.)

Re: Secondary shops flooded with unicorn sellers

#125

Post by eru »

sry_only_anon wrote: post #109
danjayh wrote: post #23

I think that this is just the beginning. In my opinion, we're heading for a tech bust that's going to spread to the rest of the economy, and deflate additional bubbles (housing, for one). The government has been pushing cheap money for the better part of a decade in the name of creating the appearance of a 'recovery', but what they've really done is build a new house of cards. Make no mistake: the 'free' money that's…

In places like SV and Vancouver housing prices are not strongly connected to the economic reach of the median person. China has a middle class as big as the entire US, and a huge number of millionaires in USD, and an unstable, opaque state-run economy, so huge numbers of rich Chinese are buying real estate abroad to protect their wealth and to give their kids a life in the US. I would be happy to see a movement to ke…

Why? If foreigners want to buy stuff, we call that exports. Just produce more of the stuff they want to buy. Ie build more apartments (= higher houses) in SV.

Re: Secondary shops flooded with unicorn sellers

#126

Post by nickgrosvenor »

danjayh wrote: post #23

I think that this is just the beginning. In my opinion, we're heading for a tech bust that's going to spread to the rest of the economy, and deflate additional bubbles (housing, for one). The government has been pushing cheap money for the better part of a decade in the name of creating the appearance of a 'recovery', but what they've really done is build a new house of cards. Make no mistake: the 'free' money that's…

"Ultimately, we'll need a correction that sticks if we want to avoid repeating these events, and for that to happen we'd need a government willing to tolerate a politically unpalatable permanent reduction in asset prices."

That's the quote right there!

Re: Secondary shops flooded with unicorn sellers

#127

Post by nickgrosvenor »

eru wrote: post #125
sry_only_anon wrote: post #109

Earlier quoted context omitted.

In places like SV and Vancouver housing prices are not strongly connected to the economic reach of the median person. China has a middle class as big as the entire US, and a huge number of millionaires in USD, and an unstable, opaque state-run economy, so huge numbers of rich Chinese are buying real estate abroad to protect their wealth and to give their kids a life in the US. I would be happy to see a movement to ke…

Why? If foreigners want to buy stuff, we call that exports. Just produce more of the stuff they want to buy. Ie build more apartments (= higher houses) in SV.

It doesn't work like that with housing, it's not a widget, it's fixed (to some degree)

Re: Secondary shops flooded with unicorn sellers

#128

Post by tayo42 »

tim333 wrote: post #120
tayo42 wrote: post #110

Earlier quoted context omitted.

I don't understand why magic leap has so much investment with nothing to show. Just in general I don't see how it could be worth that much. It's cool in a nerd way but doesn't seem to have real value. Like how is this going to make a meaningful impact on the world?

Their product comes out in 11 days. I guess the bull case is people buy the thing. They are being secretive but here's Scoble and others being upbeat in their promo vid https://youtu.be/XxwrXacMe6Y?t=25s

Didn't know they're coming out with something so soon. I guess we can all judge then. lol

I guess still to me virtual reality glasses seems like a very cool gimmick. If its a general purpose consumer product its success would be really dependent on a "killer app" and affordability. I guess we'll see... thats a lot of money invested.

Re: Secondary shops flooded with unicorn sellers

#129

Post by adventured »

danjayh wrote: post #23

I think that this is just the beginning. In my opinion, we're heading for a tech bust that's going to spread to the rest of the economy, and deflate additional bubbles (housing, for one). The government has been pushing cheap money for the better part of a decade in the name of creating the appearance of a 'recovery', but what they've really done is build a new house of cards. Make no mistake: the 'free' money that's…

It's far more likely we're about to witness a significant new housing bubble courtesy of the Fed moving to negative interest rates. The tech bust is a joke compared to the size of the housing market, there's no "spreading" that can possibly go on from the tiny unicorn bubble to housing that is going to matter. Housing is $30 trillion, the unicorn bubble is the size of one Facebook (1% the size).

See: the results of Sweden's negative interest rate policy (ie a huge housing bubble).

Re: Secondary shops flooded with unicorn sellers

#130

Post by shkkmo »

tim333 wrote: post #120
tayo42 wrote: post #110

Earlier quoted context omitted.

I don't understand why magic leap has so much investment with nothing to show. Just in general I don't see how it could be worth that much. It's cool in a nerd way but doesn't seem to have real value. Like how is this going to make a meaningful impact on the world?

Their product comes out in 11 days. I guess the bull case is people buy the thing. They are being secretive but here's Scoble and others being upbeat in their promo vid https://youtu.be/XxwrXacMe6Y?t=25s

Isn't that about Meta, not Magic Leap? I can't find any info about a Magic Leap product coming out in the near future.
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